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What is a distribution network and what are the benefits?

Jan Tore Pedersen | 05. Oct 2018
2 minutes read

A strong and efficient distribution network is an important asset for a manufacturer. But what exactly is a distribution network, and what are the advantages? 


‘Logistics network’ and ‘shipping network’ are terms used (the latter typically referring to a global network of maritime services) to describe a distribution network. In our context, a distribution network is the combination of transportation, terminal and warehousing services that we have established to best serve the needs of our customers. Simply put, the system you use to get your products from A to B.

Distribution networks can come in different shapes and set-ups, from small and simple-size networks to large and very complicated networks of logistics operations, used by large enterprises such as Apple or Amazon. Factors involved in defining the shape of the distribution network are end customer product demands, product variety, product availability, response time, returnability, and customer experience.

Advantages of a distribution network for manufacturers

Distribution is a key driver of your overall profitability.  It has a direct impact on your supply chain costs and customer satisfaction. Establishing a reliable distribution network can therefore be a strong competitive advantage and help your business stay competitive. 

Some of the main benefits of distribution network is reduced costs, more transparency and collaboration, wider customer reach and faster growth. Joining a distribution network might sound like a big and complex operation. But it‘s not! There are cloud-based logistics management systems available that allow you to create a set of optimised logistics services designed to suit your particular needs to serve your customer base.

 

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